Summary

Confidence amongst Wellington businesses has increased according to the Wellington Employers’ Chamber of Commerce latest Business Confidence survey.

A net 44.9% of Wellington businesses are expecting their own business situation will improve over the next 12 months (58.4% up and 13.5% down.) This is up from a net 35.4% the last time the survey was done three months ago.

366 people did the survey and it was carried out between 8 – 14 May before the Budget and after the PM made his remarks about Wellington.

When asked about the national economy a net 58.8% are expecting it to improve up from a net 46.7% last time.

When asked about the Wellington economy specifically, a net 18.4% of respondents expect it to get better. This is slightly lower than the 21.7% three months ago. It is possible that the publicity given to Wellington’s performance (both by the PM and the release of the Greater Wellington Regional Council paper) negatively influenced responses to this question.

Of the three measures, the first one, businesses expectations of their own situation is the most relevant. This is the one that historically aligns best to economic activity - more so than businesses impression of everyone else ie the economy as a whole. The positive response about Wellington businesses own expectations (a net 44.9% expecting their own business situation to improve) is encouraging.

29.9% of businesses are expecting to have an increase full time staff numbers in the next 12 months compared with compared with 15.9% expecting a reduction and the rest (54.2%) expecting no change. New jobs usually lags economic recovery.

One negative finding is there are more respondents expecting to decrease the level of investment in plant and equipment over the next 12 months (23.7%) than those expecting an increase (21.4%).

When respondents were asked to specify the limiting factors they are facing, a range of impediments were raised (list included in results). The difficulty in finding and retaining good staff featured particularly heavily. These reported labour shortages have been a regular if somewhat unexpected finding throughout the economic downturn.

34.6% of respondents believe it is harder to find skilled or specialist labour than it was 12 months ago. Only 6.8% say unskilled labour is harder to find.

This survey for the first time asked respondents what they thought were the top three issues holding back the Wellington economy. Responses relating to government retrenchment featured heavily as did responses relating to the performance and leadership of Wellington City Councillors.

When asked specifically about public sector retrenchment, 17.2% said they had been directly affected by redundancies in public service numbers, 43.7% said they had been indirectly affected and 39.1% said they had not been affected at all.

75.9% of respondents said they supported some form of local government amalgamation. This question has been asked many times over the last couple of years and usually records around 70%. This has risen as the debate has been given publicity.